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I strongly suspect that your PATH variable vanished for some other reason - until the 1.0.0 versions the code for appending Denemo to the path was unchanged for many years, and what it did was blindly append. The new behavior is only in 1.0.0 release (and the candidates 1.0.0~rc<n>) and it is not touching the variable.
Thank you for your kind words, I think Denemo has something unique to offer with the techniques for entering music to be seen at https://vimeo.com/61994482
We will be announcing the 1.0.0 release today I hope.

I have just downloaded and installed
http://denemo.org/downloads/denemo-1.0.0-0.mingw.exe
on a windows Vista machine and can confirm that the PATH system environment variable was unchanged after doing so.
I will be able to check that this is also true on a windows XP machine.
Note that re-booting may be needed after install, and that if a MIDI controller is attached and in use it should be turned off before exiting Denemo (see download page on denemo.org)

Which version are you using? Old versions appended the path to denemo.
The latest one (see denemo.org download page) does not touch the path env variable. Version should read 1.0.0 (see Help->About)
It is urgent that you contact me if this is not so, as we are about to release!

For some time I've been using Denemo on Linux with no serious issues. I decided to install it on my Windows 7 machine* before asking my students to do the same thing, and subsequently noticed that some other software wasn't working properly; on investigation I was surprised to see that the Denemo path had replaced my global path statement entirely - that is,

C:\Program Files (x86)\GNU_Denemo\usr\bin

had replaced everything in my system path variable. I've got version 0.9.6 installed; when I launch it from a Windows command prompt there is no text logged to either stdout or stderr - interestingly, I don't appear to be able to close the program without a force - I don't recall this being the case a couple of weeks back, so this may be due to a Windows update.